SHANGHAI: Chinese energy giant Sinopec, the world's largest oil refiner, said Monday its annual profit for 2018, soared by almost a quarter thanks to growing domestic demand for natural gas.
Sinopec's profit grew 23.4 percent to 63.1 billion yuan ($9.4 billion) in 2018, the company said in a report submitted to the Shanghai Stock Exchange.
Sinopec, whose official name is China Petroleum & Chemical Corporation, said domestic consumption of natural gas rose 18.1 percent to 280.3 billion cubic metres as the country's environmental regulations became "more stringent".
The company has benefited from a policy shift under President Xi Jinping aimed at raising natural gas consumption and reducing reliance on heavily polluting coal.
"We will make vigorous efforts in pollution prevention and environmental protection to raise the level of our green development," Sinopec chairman Dai Houliang said in the annual report.
Demand for chemicals "kept strong momentum" in 2018, while refined oil products such as gasoline, diesel and kerosene consumption gained 6.0 percent.
China surpassed Japan in 2018, to become the largest natural gas importer in the world, the official People's Daily newspaper said Saturday, citing an industry report.
PetroChina, the country's biggest oil producer, also benefited from strong natural gas demand along with rising crude oil prices as it reported on Friday a 130.7 percent increase in profit to 52.6 billion yuan in 2018.
Sinopec proposed a 0.42 yuan per share dividend for 2018 and its chairman Dai said the company's capital expenditure for 2019, will increase 15.5 percent to 136.3 billion yuan.
However, some analysts doubt whether increased spending will lead to reasonable returns.
"The oil companies may just be implementing the government's order, even if that means they produce oil at a high cost," Laban Yu, an analyst with Jefferies Financial Group Inc told Bloomberg News.
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